Microsoft says it will sign up for the recently formed EU-U.S. Privacy Shield pact. The pact, which will allow data transfers from European companies to the U.S., was approved in February and is designed to replace an older Safe Harbor agreement that was overturned by European Union's top court in October.

In a blog post, Microsoft stated:

We have reviewed the Privacy Shield documentation in detail, and we believe wholeheartedly that it represents an effective framework and should be approved. As a company, we've also said since last fall that no single legal instrument can address for all time all of the privacy issues on both sides of the Atlantic. We continue to believe today that additional steps will be needed to build upon the Privacy Shield after it is adopted, ranging from additional domestic legislation to modernization of mutual legal assistance treaties and new bilateral and ultimately multilateral agreements. But we believe that the Privacy Shield as negotiated provides a strong foundation on which to build.

Reuters reports that Microsoft is the first major U.S. tech company to sign up for the EU-U.S. Privacy Shield. However, it adds that the pact itself still has some challenges before it is fully approved:

The U.S. company's endorsement of the Privacy Shield comes amidst criticism of it by privacy groups for failing to address concerns about U.S. surveillance practices and one day before EU data protection regulators sit down for a two-day meeting on whether to endorse it themselves.